The regional government -- or Generalitat -- of Valencia hails its recently enforced wind regulation plan, Plan Eólico as little short of a panacea for many of the region's ills. President Eduardo Zaplana estimates that the plan's 1695 MW objective for 2010, amounting to 41% of the mix of new capacity forecast for the period, will cut most of Valencia's 50% generating deficit and provide and injection of wealth, employment and infrastructure.
With the plan's enforcement coming just before Spain knocked off for the holiday month of August, few wind developers have had time to gather their wits. And those who cancelled holidays to put the final touches to their strategic plans have remained cautiously tight-lipped. "There's too much at stake to comment now," said the head of one small developer. Such is the significance of the plan for the wind industry that financial newspapers in both northern Europe and the US reported on it.
One tentative complaint has already emerged from prospective project developers. The Plan Eólica clearly defines 15 development zones for a maximum of 40 potential sites. "Why does the plan differ to regulation in other regions by stipulating exactly where you can develop instead of where you can't? What happens if the private sector detects viable and environmentally compatible winds elsewhere?" asks one developer, though without wishing to spoil his chances by going public with the comment.
Part of the answer lies in the insistence by President Zaplana that any kind of large scale development in Valencia has got to be good for the region as a whole. As much of Valencia's winds are in the poor interior, the Generalitat says the Plan Eólico will contribute to "territorial equilibrium" by offsetting the worsening problem of inland depopulation. The Generalitat estimates the likely investment in the region from the wind power activity at ESP 200 billion and expects manufacturing and construction to employ 20,000 people. Plant operation and related activities are expected to create 1500 long term jobs and to generate investments totalling ESP 2 billion.
Command and control
Apart from requiring both environmental assessment and wind viability studies, Valencia's Plan Eólico demands that developers also document power infrastructure projects as part of their strategic plans. In fact, true to its interventionist form, the plan describes the most important infrastructure requirements in fine detail.
Six substations in all will go up -- financed by developers -- with the largest in the district of Requena and Maestral. Each will step up production from more than 300 MW of installed wind capacity from numerous zones, the largest of which, zone nine, is capped at 170 MW.
The main potential for friction could reside in the apparent return to the old days of classifying land earmarked for wind development as "public utility." The Generalitat has also taken over responsibility for wind plant licensing from the district councils. Over the last two years developers have been wooing landowners (mostly town halls) with attractive offers that top the national average of ESP 250,000 for each turbine installed.
From now on, however, landowners will have no choice regarding who is to develop their land. The regional press interprets that, while the Plan Eólico will leave the way open for lease negotiations between landowners and imposed developers, the Generalitat will expropriate sites if negotiations fail. The potential for heated reactions when local mayors and landowners return from their holidays very much depends on the extent to which the Generalitat is prepared to run roughshod over previously established agreements together with the emphasis it will put on the expropriation clause.
Project proposals from wind developers will greatly exceed Valencia's newly established installed capacity objective. By just how much is impossible to determine, given that developers have kept their cards very close to their chests since the Generalitat clamped its freeze on development in December 1999 while it drew up its wind plan. At least some will lose out.
Since the draft plan was published earlier this year, both large and small developers alike have been intent on finding business partners in the region. Although the Plan Eólico does not stipulate such alliances as a prerequisite (national fair trading legislation actually precludes such demands), wind developers have read between the lines and concluded alliances to be little short of obligatory de facto. Many of these local alliances had previously presented development plans individually.
Sinae, the renewables arm of Spain's fourth ranking utility, Hidrocantábrico, has so far offered the most detailed information regarding its plans in the region (Windpower Monthly, August 2001). Already one of Spain's largest wind developers -- with 112 MW on-line and 329 MW building -- Sinae has joined up with Energía y Desarrollo Sostenible (EDS), a conglomeration of eight regional companies, plus Banco Valenciano, a bank. The group is proposing to invest ESP 80 billion (EUR 492.8 million) in 18 plant totalling 492 MW. All EDS developments in Valencia aim to use turbines from Enron Wind Ibérica, the Spanish division of Enron Wind, part of the giant United States Enron energy company. Enron Wind Ibérica is responsible for realising a regional industrial and electricity infrastructure plan valued at around ESP 16.8 million.
The region's dominant utility, Iberdrola -- with approximately 3000 MW under its belt in conventional plant -- is behind the bulk of Valencia's proposed wind development, both directly and indirectly, though it has not announced its installed capacity objective. Iberdrola's most direct action comes via renewables arm Uipicsa, which has revised its previous wind strategy, now tying it up with a smaller regional affiliate, Ecovasa (Windpower Monthly, December 1999). In a region famous for the quality and quantity of its ceramics production, Ecovasa has joined up with ceramic firms Pemalsa, Italceramica, Azuvi y Zirconio.
Indirectly, Iberdrola is also present via Energías Eólicas Europeas (EEE). This company is controlled in equal parts by Spain's largest wind developer, Energía Hidroeléctrica de Navarra (EHN) and Iberdrola, though EHN carries the executive reigns. EEE has created a regional wing, Renomar, which, in turn, has hooked up with Valencian firms to form developer Enermed, according to Spain's financial daily, Cinco Días. EHN offered some indication of its regional stakes last year when it declared a five year investment plan in Valencia totalling ESP 140,000 million (EUR 841.4 million (Windpower Monthly, May 2000), investment enough for around 1000 MW.
Iberdrola's least direct regional involvement is via its shares in the Gamesa group, which owns both Spain's turbine giant, Gamesa Eólica, as well as a rapidly expanding developing wing, Gamesa Energía. Gamesa Energía's Valencia link reportedly resides in shares held in the holding company by Emilio Serratosa, a Valencian businessman. Although Gamesa has not announced its installed capacity objective, Cinco Días affirms that it has focussed on zones one, two and three in the province of Castellón, which the Plan Eólica caps at 385 MW.
Unión Fenosa Energías Especiales SA (UFEESA), the renewables arm of Spain's third utility, Unión Fenosa has recently revealed its two main partners in Valencia. The first is construction giant ACS, which has already put up 48 MW with UFEESA in Galicia. The second is Spain's largest electricity co-operative, Crevillente. Together the three companies plan to develop 300 MW.
The list of joint ventures includes less ambitious plans from independent power producer Elecdey, which traditionally aims to concentrate on small profitable projects. Earlier this year Elecdey joined up with regional textiles giant Colortex to form Eólica de Levante. Regional press sources have put the partnership's plan at 67 MW, though neither partner has confirmed.
As far choice of wind turbine technology goes, only Sinae -- with Enron wind turbines -- and Gamesa Energía, using turbines from Gamesa Eólica, have put their cards cleanly on the table. All other orders remain under wraps. Insiders consider one of the main contenders to be Izar-Bonus, which belongs to Izar, a shipbuilding, engineering and energy giant. Regional shipbuilders Manises Diesel also part of the Izar group, last year revealed its hopes to save jobs by producing towers for the wind industry.
The only other manufacturer to reveal at least some of its colours has been Germany's Frisia Windkraftanlagen Produktion, a newcomer to the Spanish market. Earlier this year the company announced joint plans with Valencia's engineering firm, Industrias Ochoa, to produce, initially, 500, 1 MW turbines, though with a view to exporting them also to other regions.
But on the whole, secrecy shrouds regional wind plans and Spain's main manufacturers are respecting their clients' request for confidentiality, maintaining a stony silence regarding agreements in the region. Only time will tell if Valencia's Plan Eólico will provide an opening for new blood in Spain's wind market.